Anti-Statism in America

November 11, 2009

Why Americans hate to love government.

Anyone who has followed closely the debate over national health insurance has probably noticed some peculiar inconsistencies in Americans’ attitudes toward the legislation. A Pew Poll released on October 8 found “steady support” for specific elements of the health care plan, including the public alternative to private insurance, the employer mandate, and the requirement that everyone have insurance. Nonetheless, popular support for the plan itself was declining, with 34 percent “generally [in] favor” and 47 percent “generally opposed.”

What accounts for this disparity? Certainly, some people fear that Medicare will be cut, or that “death panels” will be set up, but one of the most persistent concerns is not about specific provisions; rather, it’s that the federal government will be taking over health care. In a Washington Post poll last month, a plurality worried that the health care plan “creates too much government involvement.” In a poll taken October 9–13 by Public Strategies in conjunction with Politico, 52 percent of respondents feared that Congress would go “too far in increasing the government’s role in health care.” In a Harris poll in early October, 65 percent agreed, and only 22 percent disagreed, with the “criticism” that “the proposed reform would result in a government-run health care system.” In other words, Americans are looking to the government for help, but they still don’t like the government.

And this isn’t just confined to the health care debate. You get the same inconsistencies if you look at polls about government regulation of finance and business. Polls show majority support for specific new measures, such as restricting CEO salaries and establishing a new consumer financial-protection agency, but the Public Strategies/Politico poll found that 68 percent of respondents preferred “better enforcement of existing regulation” over “new regulations.” Again, Americans are turning to government, but they distrust letting it do too much.

This pattern of belief is deeply rooted in the American psyche and has regularly stymied efforts at reform. Americans have supported, or have come to support, specific governmental remedies, such as Social Security, the minimum wage, and environmental and consumer protections. But, when a new program that expands government is proposed, they have displayed a general ideological predisposition against the power of government. As Obama tries to get his reform agenda through Congress, this predisposition is already proving to be a formidable obstacle.

Americans’ skepticism about government dates at least from the Revolution. In The Liberal Tradition in America, published in 1955, political scientist Louis Hartz described the Americans of 1776 as “Lockean liberals.” He was using the term “liberal” in its classic connotation--more like today’s free-market conservative or libertarian. Americans, he perceived, envisaged the state as strictly limited to protecting property relations among equal producers. They saw strong government--which they identified with the British crown--as a threat to economic and political freedom. Government, in Thomas Paine’s words, was a “necessary evil.”

The first adherents to this Lockean liberalism were followers of Thomas Jefferson and Andrew Jackson--small farmers and (in Jackson’s case) urban workingmen who attacked the statism of the Federalist elite. But, after the Civil War, a rising business class invoked it against the political left, claiming that a policy of laissez-faire would best ensure a prosperous America. Lockean liberalism became free-market conservatism.

By the end of the nineteenth century, panics, crashes, yawning inequality, and other market failures provoked a challenge to this free-market conservatism; populists, socialists, progressives, and, later, liberals called for the state to curb the market. But, even during the high tides of liberal reform, free-market ideology held sway. In 1935, Americans overwhelmingly backed specific New Deal programs, but Gallup found them opposed to an increase in government regulation by 53 percent to 37 percent. In a pathbreaking 1967 book, The Political Beliefs of Americans, political scientists Lloyd Free and Hadley Cantril found that Americans suffer from a contradiction between “ideological conservatism” and “operational liberalism.” According to their analysis of surveys they had conducted, only 16 percent of Americans--with blacks and Jews leading the way--were ideologically and operationally liberal.

There are a number of converging factors that help explain why ideological conservatism has endured and so often bested operational liberalism. Lockean liberalism clearly benefited from its identification, in the nineteenth century and early twentieth century, with rapid economic growth. Like the British of the early twentieth century who clung to the gold standard as the secret of their past glory, Americans clung to the myth of the unfettered free market. At the same time, there was never a strong statist tradition from which reformers could draw their precedents. Americans lacked not only a feudal absolutist past, but also a history of successful state capitalism: Liberals and progressives could only invoke European or Federalist precedents. The great progressive manifesto that advocated a strong state, Herbert Croly’s The Promise of American Life, appeared in 1909 and has been largely ignored ever since.

Lockean liberalism also got a boost from business lobbies and Republicans, who, in the first half of the twentieth century, worked to align “free enterprise” with the “American way of life” and liberal or progressive statism with socialism, communism, and fascism. Later, Republicans succeeded in identifying liberalism with taxes on the middle class and spending on minorities.

The success of this rebranding did in Obama’s two Democratic predecessors. Republicans, working with the Business Roundtable and the U.S. Chamber of Commerce, defeated Jimmy Carter’s popular proposal for a new consumer-protection agency by raising the specter of a new government bureaucracy. It was downhill from there. A similar coalition beat back Bill Clinton’s signature program for national health insurance by portraying it as a state takeover of health care. From September 1993, when Clinton’s plan was introduced, to March 1994, the percentage of Americans who believed it represented “too much government involvement” rose from 38 percent to a clear plurality of 47 percent. Not long after Republicans captured Congress in 1994, Clinton declared that “the era of big government is over.”

Liberals and progressives have fared poorly in the face of this staunch anti-statist tradition, but there have still been periods when they have broken through and enacted major reforms--during Woodrow Wilson’s first term, Franklin Roosevelt’s first term, Lyndon Johnson’s first two years, and Richard Nixon’s first term. They succeeded for different reasons at different times, but several conditions recur.

To begin with, market breakdown has always helped the cause of operational liberalism. Wilson and the reformers in Congress were able to pass legislation establishing the Federal Reserve and the Federal Trade Commission because a succession of depressions and bank panics had worried business and angered workers and farmers. Roosevelt’s reforms, of course, came on the heels of the 1929 crash and the Great Depression, which raised questions about the sanctity of the market.

Democratic ability to neutralize business and energize the left has also been key to reform. Roosevelt and Democrats in Congress took advantage of divisions within business, as well as the public’s distrust of business leaders, to get their program across. They also benefited from the energy of organized movements on their left. If it had not been for the pressure exerted by a renascent labor movement and by the followers of populist Huey P. Long and pension advocate Francis Townsend, Roosevelt (who was privately something of a Lockean liberal) might never have backed, and Congress might never have passed, tax reform, Social Security, and the National Labor Relations Act.

These same conditions--a divided business community and an energized left--were also key to the spate of reforms adopted during Nixon’s first term. Business, fearful of an alliance between labor and the New Left, and of popular movements for environmental and consumer reform, acquiesced to proposals for regulatory reform put forward by Democratic majorities in Congress. Incredible as it may seem now, a 1970 Fortune survey of executives from the 500 largest firms found that 57 percent believed government should “step up regulatory activities.” That support would quickly plummet, but it allowed a great burst of liberal reform to occur.

Of course, having party majorities in Congress has also been important. In 1935, Democrats and two allied parties held 71 of 96 Senate seats and 332 out of 435 House seats. In 1965, Johnson could count on 68 senators and 295 House representatives. These huge majorities allowed Roosevelt and Johnson to function in a quasi-parliamentary manner, ignoring their partisan opposition in Congress and passing reforms representing compromise between the center and left of their own parties.

Finally, reformers have learned how to craft their proposals in ways that would not raise anti-statist hackles. Wilson, Roosevelt, and the Democrats in Nixon’s first term targeted specific abuses of the market for regulation. They claimed to be improving, rather than limiting, the operation of the market. Wilson’s Federal Trade Commission was billed as the means to promote market competition. Roosevelt replaced planning with regulation after the Supreme Court threw out the National Recovery Administration. And liberals promoted welfare measures, including old-age pensions and unemployment compensation, that were aimed at meeting public needs that the private market could not or would not meet. They were consistent with a mild strain of Lockean liberalism.

Obama took office promising a version of Roosevelt’s first hundred days, and conditions were auspicious for major reform: The market had broken down to the extent that a second Great Depression loomed on the horizon; business was divided and demoralized; the public was ready to entertain drastic measures, even if they entailed an increase in governmental power; liberal and left-wing movements were invigorated by Obama’s victory; and Obama and the Democrats enjoyed majorities in the House and the Senate.

Obama and the Democrats did get a stimulus bill through Congress, but getting the rest of their reform agenda has proven to be more difficult. A hundred days have given way to 200 and will soon give way to a year. What has held up their efforts at reform? The basic problem is that the economy, while not recovering, has stopped spiraling downward; public concern has begun to shift away from the failure of the market to the failure of government to revive the market. Ideological conservatism has re-emerged with a vengeance.

According to the Pew poll, Americans who prefer “smaller government, fewer services” to “bigger government, more services” has risen from 42 percent in October 2008 to 48 percent this March to 51 percent at the beginning of October. In Gallup’s surveys, conservatives now outnumber moderates as well as liberals for the first time since 2004--with the most important change being an increase in the percentages who think there is “too much government regulation.”

Business and its Republican allies have also revived, and they have actively lobbied against Obama and the Democrats’ reform agenda. America’s Health Insurance Plans (AHIP), which led the fight against Clinton’s health care bill in 1994, has taken the field; the American Financial Services Association is trying to eviscerate financial regulatory reform; the American Petroleum Institute is running ads against climate-change legislation; and conservative Republicans have organized “Tea Parties” to protest the Democratic agenda. Left-wing and liberal groups have countered these efforts and attacked moderate Democrats who, in the face of business pressure, have begun to waver. But, as yet, they lack the disruptive power of the movements of the 1930s or late ’60s.

Support for specific liberal reforms persists and, in some instances, has even grown this fall. But, increasingly, that support has had to co-exist with a vibrant and unsettling ideological conservatism. Obama and the Democrats’ opening for reform is not nearly as large as those enjoyed by Roosevelt or Johnson in their early years in office. That has put a premium on the political skill of Obama and the Democratic congressional leadership at deflecting criticism and outmaneuvering their opposition. They have performed well, but by no means perfectly.

To allay suspicions of statism, Obama and the Democrats have had to avoid the impression that they are advocating a federal takeover of the health care system, government planning to avert a climate crisis, and federal control of the banking system. And they have done their best to do so. In framing their proposals, Obama and the Democrats have opted for regulation rather than nationalization and for programs that supplement rather than replace what the market already does. When Republicans and business lobbies have attacked the public option in the Democrats’ health care bill as a Trojan horse for a government takeover of insurance, Democrats have successfully framed it as an expansion rather than a constriction of free-market choice. In a Washington Post poll from October 18, respondents favored it by 57 percent to 40 percent. In a CNN poll conducted at the same time, respondents favored a public option by 61 percent to 38 percent.

The administration has also sought to divide business. It has wooed some hospital and drug firms to back its health plan; it has taken advantage of rifts between banks and investors to push its financial regulatory reform; and it has courted pro-green firms that back its climate bill. When Apple, Exelon, and other companies quit the U.S. Chamber of Commerce over that body’s opposition to climate-change legislation, it was a major victory for the administration.

Where the Obama administration has stumbled is in handling the Republicans in Congress. In its eagerness to avoid attacks from business and conservative Republicans, and to win over the few Republican moderates, the White House has appeared willing to ditch significant parts of its reform program, including the public option from its health care bill and strict regulation of derivatives from its financial-reform proposal, even though these kinds of measures have remained popular among the public.

The White House has also mishandled liberal and left-wing movements when they have run ads against wayward Democrats who appeared unwilling to back the administration’s reform agenda. Generally, the White House has tried to discourage them from taking positions independent of the administration’s. And it has thrown its support to Organizing for America, a quasi-political machine that grew out of the campaign and that is united by its loyalty to Obama rather than by its support for liberal reform. That’s a mistake. Obama and the Democrats need active, unruly, and independent pressure from the left to combat Republican conservatives, intimidate Democratic fence-sitters, and persuade business that, if it doesn’t back Obama’s reforms, it could face much more radical measures.

Still, with these exceptions, Obama and the Democratic leadership in Congress have done well under conditions that are not as favorable for reform as they seemed in January. Obama and the Democrats understand not only the opportunity for reform, but also the long-standing ideological obstacles they face in obtaining it, and they have adopted a strategy of dividing business and framing their proposals as market reforms. If they continue to do so, and if they are not scared off by pressure from the right, they should succeed in getting a health care bill and new financial regulations. A climate-change bill will be more difficult but not impossible, as long as they can keep the voting public focused on the specifics of liberal reform rather than the atmospherics of ideological conservatism.